A report from the Director of Health, Housing and Adult Social Care and Director of Finance, Resources and Customer Services is attached. This seeks approval of the framework, which sets out the models and finance options for the purchase of properties. (Key decision – reference number 3808)

(Report No.116)

(8.40 – 8.45 pm)

Councillor Ahmet Oykener (Cabinet Member for Housing) introduced the report of the Director of Finance, Resources and Customer Services and Director of Health, Housing and Adult Social Care (No.116) setting out the potential models and finance options for the purchase of properties.

NOTED

1.               That the demand for housing in Enfield was continuing to increase with particular pressures for temporary accommodation and private sector leasing, as set out in the report. In order to meet housing needs a framework of finance options had been produced, for consideration when determining the finance route for future projects and programmes involving the purchase of properties or the development of new homes. The framework essentially had four different purchase structures: Council owned; local authority company owned; a joint venture, either a company with both local authority and private interest or; private ownership, as outlined in the report.

2.               That a decision about the most appropriate investment model and finance stream would need to be taken for individual schemes.

Alternative Options Considered: Consideration had also been given to other forms of commercial loans, which were more complex than Public Works Loan Board (PWLB) but could offer a number of different options. Typically loans were very long term, for example up to 60 years and the interest rate was fixed. The lender was also able to call on the facilities at pre-determined future dates, such as every five years, and propose or impose a new fixed rate for the remaining term, so the borrower either needs to pay this increase rate or repay the loan at that junction. Enfield had not used this form of borrowing to date as this was considered to favour the lender too much and could expose local authorities to significant finance risk. Since 2008 these types of loans had become very rare. Enfield’s Housing Strategy (2012-2027) set out a number of other options and interventions the Council was planning to respond to challenges around housing. This investment framework would complement the wider preventative initiatives already planned.

DECISION: The Cabinet agreed to

1.               Approve the framework, which set out the models and finance options for the purchase of properties.

2.               Note that the most appropriate model and finance stream would vary depending on the individual requirements of particular projects and target population, and an assessment of risk and opportunities would need to be considered for all projects in selecting the most appropriate model.

3.               Note that decisions about the most appropriate option from the framework would be made for individual projects in line with the Council’s scheme of delegation, for example through a Cabinet or an appropriate Cabinet Member(s) decision.

Reason: There was a shortage of high quality housing in the borough with secure longer term leases and demand for accommodation across all tenures was continuing to grow. This provided a framework of funding options to be considered against the requirements of particular projects and programmes. The framework set the strategic framework for development and/or acquisition of properties. The merits and limitations of each model would be considered in the context of individual projects and its aims.

(Key decision – reference number 3808)